New Delhi: SBI Chairman Dinesh Kumar Kala Says regulatory action is frustrating retail investors “Betting in derivatives markets may help the banking system gain much-needed deposits, but budget announcements, such as adjustments to short- and long-term capital gains, will not help deposits rise.
“Regulators are discouraging retail (investors) from using things like F&O (futures and options). Those who resort to such instruments may go back to the banking system,” Khara told PTI.
These concerns are exacerbated by concerns that 90% of investors lose money trading derivatives. The potential for household savings to be “speculated rather than used for productive purposes” remains a major concern for policymakers.
According to data from the Securities and Exchange Board of India (Sebi) said retail investors “suffered a staggering loss of Rs 52,000 crore in such activities in fiscal 2024 alone”, highlighting the urgent need for crackdowns.
Sebi has come up with a comprehensive seven-point plan to curb such transactions, besides, union budget Measures specifically aimed at reducing these speculative activities have also been introduced.
Over the past three years, deposit growth has failed to keep pace with credit expansion. Harra said the funds will flow to other channels such as capital markets.
Nonetheless, Kara points out bank Accounts remain the main vehicle for savings and continue to offer attractive interest rates, noting that a similar phase occurred in 2011 when the banking system went through a period in which deposit growth lagged credit growth.
There are growing concerns that the gap between deposit and credit growth is widening, which could lead to bank Slowing lending activity, which could have a negative impact on overall economic growth.
Khara said SBI, which accounts for more than one-fifth of the market share, aims to achieve credit growth of 15% and deposit growth of 8% in fiscal 2025.
Although SBI Kara stressed that due to its liquidity position, the credit growth target can still be achieved even if deposit growth slows to 8%.
in the past, SBI Choosing to allocate excess deposits to portfolios currently unwinds them in the same way as credit needs are met, Kara said.
He further added that SBI’s liquidity coverage ratio currently stands at 128% and the bank has decided to maintain it above 110% in future.
(Based on input from each agency)
“Regulators are discouraging retail (investors) from using things like F&O (futures and options). Those who resort to such instruments may go back to the banking system,” Khara told PTI.
These concerns are exacerbated by concerns that 90% of investors lose money trading derivatives. The potential for household savings to be “speculated rather than used for productive purposes” remains a major concern for policymakers.
According to data from the Securities and Exchange Board of India (Sebi) said retail investors “suffered a staggering loss of Rs 52,000 crore in such activities in fiscal 2024 alone”, highlighting the urgent need for crackdowns.
Sebi has come up with a comprehensive seven-point plan to curb such transactions, besides, union budget Measures specifically aimed at reducing these speculative activities have also been introduced.
Over the past three years, deposit growth has failed to keep pace with credit expansion. Harra said the funds will flow to other channels such as capital markets.
Nonetheless, Kara points out bank Accounts remain the main vehicle for savings and continue to offer attractive interest rates, noting that a similar phase occurred in 2011 when the banking system went through a period in which deposit growth lagged credit growth.
There are growing concerns that the gap between deposit and credit growth is widening, which could lead to bank Slowing lending activity, which could have a negative impact on overall economic growth.
Khara said SBI, which accounts for more than one-fifth of the market share, aims to achieve credit growth of 15% and deposit growth of 8% in fiscal 2025.
Although SBI Kara stressed that due to its liquidity position, the credit growth target can still be achieved even if deposit growth slows to 8%.
in the past, SBI Choosing to allocate excess deposits to portfolios currently unwinds them in the same way as credit needs are met, Kara said.
He further added that SBI’s liquidity coverage ratio currently stands at 128% and the bank has decided to maintain it above 110% in future.
(Based on input from each agency)
